SpaceX agrees to buy US low-band spectrum licences for mobile service; carrier shares fall
In short
SpaceX has agreed to acquire a portfolio of low-band spectrum licences covering the United States for mobile communications, Chinese outlets reported. IT Home, citing Reuters, said the 800 MHz spectrum is being bought from private equity firm Grain Management and the deal still needs approval from the US Federal Communications Commission. Shares of AT&T, T-Mobile and Verizon fell about 5% or more in after-hours trading.
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SpaceX has agreed to acquire a portfolio of low-band spectrum licences covering the United States for mobile communications, the company said on Thursday, according to 36Kr. SpaceX said the deal would allow it to use its Starlink satellite service to become a major mobile operator in the United States. CLS also reported that SpaceX will acquire low-band spectrum licences for mobile communications. [ 1 , 3 ]
IT Home, citing a Reuters report of October 8, said SpaceX is buying a nationwide 800 MHz low-band spectrum portfolio held by private equity firm Grain Management, and that the transaction still needs approval from the US Federal Communications Commission. The band includes up to 14 MHz of paired low-band spectrum. IT Home said low-frequency signals penetrate well, which helps coverage indoors, outdoors and in gaps in traditional cellular networks. It said the deal paves the way for SpaceX's Starlink Mobile service to enter the US telecoms market directly. [ 2 ]
SpaceX said Starlink Mobile's existing global 2 GHz mid-band spectrum provides higher bandwidth capacity, while the added 800 MHz spectrum addresses signal penetration and lets it build a hybrid satellite and terrestrial network, IT Home reported. Elon Musk called it a very big deal and said low-band spectrum is the last key piece of the spectrum puzzle SpaceX needs to provide full mobile phone coverage in the United States, according to IT Home. [ 2 ]
Shares of the three largest US wireless carriers fell in after-hours trading. IT Home reported AT&T down about 6.75% at one point, T-Mobile down about 5.4% and Verizon down about 5%, citing concerns about increased competition and a possible price war. 36Kr, citing Sina Finance, said T-Mobile US, Verizon Communications and AT&T each fell more than 5% in after-hours trading in New York. [ 2 , 3 ]
Why it matters
SpaceX said the deal would let it use Starlink to become a major mobile operator in the United States. IT Home linked the fall in the three largest US wireless carriers' shares to concerns about increased competition and a possible price war.
Key facts
- SpaceX will acquire low-band spectrum licences for mobile communications. [ 1 , 2 , 3 ]
- The licence portfolio covers the whole United States. [ 2 , 3 ]
- According to IT Home, citing Reuters, the seller is private equity firm Grain Management and the spectrum is in the 800 MHz band, with up to 14 MHz of paired low-band spectrum. [ 2 ]
- The deal still requires approval from the US Federal Communications Commission (FCC), IT Home reported. [ 2 ]
- SpaceX said the deal would allow it to become a major US mobile operator using its Starlink satellite service. [ 3 ]
- AT&T fell about 6.75%, T-Mobile about 5.4% and Verizon about 5% in after-hours trading, according to IT Home. [ 2 ]
Confirmed by several sources
Still unclear
- The price of the deal. None of the documents gives a price.
- Whether the FCC will approve the transaction. IT Home reports that FCC approval is still required; no outlet reports on its timing or outcome.
- The size of Verizon's share drop. 36Kr says all three carriers fell more than 5%, while IT Home puts Verizon's fall at about 5%.
What local media are saying
Timeline, local time
- CLS reports that SpaceX will acquire low-band spectrum licences for mobile communications. [ 1 ]
- IT Home publishes details citing Reuters, including the seller, the FCC approval requirement and carrier share moves. [ 2 ]
- 36Kr reports SpaceX's statement and the after-hours fall of more than 5% in US carrier shares. [ 3 ]